ombudsman news

issue 131

January/February 2016

ombudsman focus: keeping things moving - an update

In June last year, Garry Wilkinson, principal ombudsman and director of new services, explained how the ombudsman and businesses are working together to improve the service we all offer. In this ombudsman focus, Garry's back with a reminder about what's happening - and an update on how we're resolving problems at an early stage.

Garry Wilkinson, principal ombudsman and director of new services

first of all Garry, can you give a recap of what’s been happening?

Last year, I explained the changes that have happened in the 15 years since we were set up - and what they've meant for the ombudsman and for resolving complaints. In particular, I talked about new technology - and how it's totally changed people's expectations of the businesses and services they use.

For example, it's incredible to think that only fifteen years ago, many people didn't even have a personal email address. Although not everyone's online - our own research shows that, among people who use our service, one in seven don't have internet access - it's pretty much the norm now. And people are even starting to see email as a bit old school these days, with mobiles and social media becoming the preferred way to keep in touch.

At the ombudsman, we have to keep pace with these changes. It's part of our responsibility to be an accessible service - which means being relevant and easy to use for everyone in the UK, businesses and consumers alike.

So over the years, we've already been developing our services to meet people's changing lifestyles and preferences. We've extended our hours, recognising that people need us outside 9-5. People can contact us simply online and by mobile, whenever and wherever they choose. Our case files are now completely electronic - and last year, we resolved one in five payday loan problems over webchat.

sounds like progress …

Yes, it is. And it's clear that successful businesses also understand that this stuff matters. I've done my banking online for years, and apps are facts of life, not gimmicks. Like us, financial businesses use social media to quickly resolve customer concerns - informally, and sometimes even with a sense of humour.

On the other hand, I think it's fair to say that if a problem escalates, this type of progress isn't so apparent. Timeframes of weeks or even months to get a response - which may not even be a resolution - have always caused frustration. These days, they're just unacceptable.

we've seen a real improvement in how quickly we can give our answers

so what's being done to change things?

We've always worked pragmatically with businesses to resolve problems as quickly and informally as possible. In ombudsman news last year (June 2015), I gave the example of a major banking glitch - after which large numbers of people got in touch with us to report missed and missing payments.

In some cases, people couldn't cover essential expenses. It's just common sense that, in this situation, funnelling everyone into a long and formal complaints procedure would have been totally inappropriate. So we and the bank worked together at an early stage, mainly over the phone, to put things right for their customers within days and even hours.

More recently, we've been talking to businesses about timeframes for giving us information about complaints that have been escalated to us. Rather than thinking about rigid "deadlines", we've been encouraging more flexibility.

For example, it's likely that a large bank could give us certain information on the same day we ask for it. On the other hand, a consumer - or a much smaller business, such as an independent financial adviser - may well need longer to find what we've asked for. It's all about what's reasonable in the individual circumstances.

rather than thinking about rigid "deadlines", we've been encouraging more flexibility

and is this approach working?

Where we've been working differently, we've seen a real improvement in how quickly we can give our answer. In some cases, all it takes is one phone call - and on average, it's now taking three weeks. And four in five people - whether or not we've technically "upheld" their complaint - are telling us they're satisfied with their experience of using our service.

It's not surprising that speed makes a difference - given the worry, lost time and practical trouble caused by money-related problems. Of course, this all reflects well on businesses too - and business complaints-handlers have been telling us about the positive feedback they've been getting from their customers.

For people who are motivated by giving great customer service - at the ombudsman and at businesses - it's been refreshing to challenge inflexible procedures and bureaucracy. The business case, which is of course essential, is that applying innovation and pragmatism on the front line means fewer costly, resource-heavy disputes in the long run.

The FCA has also been reviewing how businesses are handling complaints. And after consulting, they're now putting in place changes aimed at improving customers' experience of making a complaint - as well as helping businesses to resolve and prevent them more effectively.

So all the improvements we and businesses have made over the years - enabling us to resolve problems sooner rather than later - are reflected in the wider changes that are going on across financial services at the moment.

some have given us their consent across the board to get involved early on

so how are these changes reflected in the rules about complaints?

The FCA has made a number of changes to the complaints-handling rules. They've applied since 9 July 2015, at the same time the EU directive on alternative dispute resolution (ADR) came into UK law.

If someone contacts us before they've raised their problem with a business, we generally direct them back to the business in question - and in some cases, help to get things moving. It's something we've always done - to give the business a chance to put things right, which might not take the eight weeks they technically have under the rules.

Since July 2015, the rules include the option for us to actually look into a complaint during those eight weeks. The business has to give their consent for us to do this, whatever their customer wants to happen. And the business still has to look into the complaint themselves.

have businesses and consumers found it helpful?

Well, it was actually happening even before the new rule came in. There have always been situations where businesses are willing to, or suggest, working with us outside official timeframes.

Generally, it happens when we agree and the business agree that an independent view is needed as soon as possible. For example, a business's relationship with their customer might have completely broken down. Or someone's vulnerability might mean it's essential to resolve things in hours, not weeks.

But the rule is new and slightly different - so we've been trying it out with some businesses over the past few months, working through any challenges together. It's been great to hear that businesses have been really pleased with the results. So much so that some have given us their consent across the board to get involved early on, rather than having to make that decision for each individual complaint.

So if you do hear from us before you've given a customer your final response, it's really nothing to worry about. The businesses we've worked with so far have been reassured it's a good option in some circumstances. But it's completely your choice.

would it count as a "complaint" to the ombudsman?

Yes - complaints we investigate during the eight-week period still count as "chargeable" complaints. For the time being, we're including the numbers, but not the outcomes, in our regular published data - and we're keeping this under review.

In our consultation on our plans and budget for 2016/2017, we've explained that we're not planning to change how we charge businesses for resolving complaints this year. But in light of the different ways we're now resolving the problems people bring to us, over the next few months we'll be gathering views on keeping our fee arrangements fair into the future.

haven't the timeframes for complaining changed?

The timeframes haven't changed, but the rules around them have. Again, the change happened on 9 July 2015.

As you'll know, we're sometimes able to look into a complaint if it's referred to us too late. That means more than six months after receiving the business's final response - or more than six years after what they're complaining about happened (and possibly later, but only in certain circumstances).

Since 9 July 2015 - apart from in exceptional circumstances - businesses have to give their specific consent for us to look into these complaints. Before then, we could look into them unless the businesses actually objected.

and there are more changes to come, aren't there?

From 30 June 2016, a change to the FCA's rules will mean businesses have longer - three working days - to give a "summary resolution" to a complaint. At that point, they'll have to let their customer know that they can refer the complaint to us.

We don't know the impact that will have on numbers of complaints being referred to us. But we'll keep an eye on the situation. And in the meantime, we've asked businesses to tell us what they think the impact may be - when they respond to our consultation on our plans and budget for next year.

There are also some changes to how businesses need to record complaints - so it's worth checking the FCA's website to see what you'll need to do differently.

so what's next?

As we continue to develop and establish these more flexible ways of working, they're quickly just becoming "business as usual". Given the ongoing changes in technology, lifestyles and expectations - not to mention the potential for business efficiencies and significantly happier customers - I think the sooner this happens, the better. And from the feedback we've had so far, businesses and consumers seem to agree.

As usual, we'll be regularly keeping in touch with businesses and other stakeholders - so we can discuss how things are going and what could improve even further. If you have any questions - or other practical issues - you can phone our technical advice desk on 020 7964 1400. Or our adjudicators will be able to talk through what these changes mean for particular complaints.